Calgon Carbon Announces Third Quarter Results

Calgon Carbon Corporation (NYSE: CCC) reported results for the third quarter ended September 30, 2014.

For the third quarter of 2014, the company reported income from operations of $18.9 million as compared to $17.9 for the third quarter of 2013, an increase of 5.6%. Net income for the third quarter of 2014 was $12.2 million versus $11.9 million for the third quarter of 2013. On a fully diluted basis, net income per common share for the third quarter of 2014 was $0.23 versus $0.22 for the comparable period of 2013.

Net sales for the third quarter of 2014 were $137.7 million versus third quarter 2013 sales of $139.4 million, a decrease of 1.2%. Currency translation had a $0.6 million positive impact on sales for the third quarter of 2014 due to the stronger British pound sterling.

For the third quarter of 2014, sales of Activated Carbon and Service increased by 1.1% as compared to the third quarter of 2013. The increase was due to higher demand for activated carbon in the industrial process and environmental water treatment markets.

Equipment sales for the third quarter of 2014 declined by 19.5% versus the third quarter of 2013 due to lower sales of carbon adsorption equipment and traditional UV systems. This was partially offset by higher sales of ballast water treatment systems. Third quarter 2014 Consumer sales (activated carbon cloth) declined by $0.4 million, or 13.8%, over the comparable period of 2013.

For the third quarter of 2014, net sales less the cost of products sold (excluding depreciation and amortization) as a percentage of net sales was 34.6%, versus 33.3% for the third quarter of 2013. Positive impacts from the company’s global cost improvement program and higher pricing for certain activated carbon products and services accounted for the increase.

Selling, administrative and research expenses for the third quarter of 2014 were $21.2 million, as compared to $21.0 million for the third quarter of 2013. The slight increase was attributable to the company’s SAP re-implementation program which was partially offset by ongoing expense control efforts.

Net sales for the nine months ended September 30, 2014 were essentially comparable to net sales for the nine months ended September 30, 2013. Currency translation had a $1.8 million positive effect on sales for the nine months ended September 30, 2014, primarily due to the stronger euro and British pound sterling, partially offset by the weak yen.

Income from operations for the nine months ended September 30, 2014 was $55.8 million as compared to $53.1 million for nine months ended September 30, 2013. Net income for the nine months ended September 30, 2014, was $37.2 million versus $34.7 million for the comparable period of 2013.

Fully diluted net income per common share for the nine months ended September 30, 2014, was $0.69 as compared to $0.64 for the comparable period of 2013.

Commenting on the results, Randy Dearth, Calgon Carbon’s Chairman and Chief Executive Officer, said, “We had a solid third quarter. Due to our ongoing efforts, gross margin percentage, a very important metric for our business, has improved sequentially in seven of the last eight quarters from 27.3% to 34.6% for the third quarter of 2014.

“Contributing to the increase in gross margin in the third quarter was the positive effect of our global cost improvement program, which included lower coal costs -- the result of two five-year coal contracts that we negotiated in December 2013. I am pleased to report that we are on track to realize our goal of $40 million in annual savings, beginning in 2016.

“With margins expanding and operating expenses under control, we are placing more emphasis on sales to ensure sustained top line growth going forward. Our optimism is based on recent contract awards, including an agreement announced last week to supply 7.2 million pounds of granular activated carbon to a municipality in Korea for drinking water treatment. This is the second contract secured by Calgon Carbon in 2014 for a multi-million pound initial fill in Korea.

“We are also encouraged by discussions with electric utilities that have tested or are planning to test our advanced products for mercury removal. We expect to secure contracts in that market in the fourth quarter, and we are confident that we will have sufficient carbon to meet growing demand in both traditional and emerging markets.”

Pure Water. Clean Air. Better World.

Calgon Carbon Corporation (NYSE:CCC) is a global leader in innovative solutions, high quality products and reliable services designed to protect human health and the environment from harmful contaminants in water, and air. As a leading manufacturer of activated carbon, with broad capabilities in ultraviolet light disinfection, the Company provides purification solutions for drinking water, wastewater, pollution abatement, and a variety of industrial and commercial manufacturing processes.

Calgon Carbon is the world’s largest producer of granular activated carbon and supplies more than 100 types of activated carbon products - in granular, powdered, pelletized and cloth form – for more than 700 distinct applications. Headquartered in Pittsburgh, Pennsylvania, Calgon Carbon Corporation employs approximately 1,100 people at more than 15 manufacturing, reactivation, and equipment fabrication facilities in the U.S., Asia, and in Europe, where Calgon Carbon is known as Chemviron Carbon. The company also has more than 27 sales and service centers throughout the world.

For more information about Calgon Carbon’s leading activated carbon and ultraviolet technology solutions for municipalities and industries, visit www.calgoncarbon.com.

This news release contains historical information and forward-looking statements. Forward-looking statements typically contain words such as “expect,” “believe,” “estimate,” “anticipate,” or similar words indicating that future outcomes are uncertain. Statements looking forward in time, including statements regarding future growth and profitability, price increases, cost savings, broader product lines, enhanced competitive posture and acquisitions, are included in the company’s most recent Annual Report pursuant to the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. They involve known and unknown risks and uncertainties that may cause the company’s actual results in future periods to be materially different from any future performance suggested herein. Further, the company operates in an industry sector where securities values may be volatile and may be influenced by economic and other factors beyond the company’s control. Some of the factors that could affect future performance of the company are higher energy and raw material costs, costs of imports and related tariffs, labor relations, availability of capital and environmental requirements as they relate both to our operations and to our customers, changes in foreign currency exchange rates, borrowing restrictions, validity of patents and other intellectual property, and pension costs. In the context of the forward-looking information provided in this news release, please refer to the discussions of risk factors and other information detailed in, as well as the other information contained in the company’s most recent Annual Report.

*Before depreciation and amortization and restructuring.